Which of the following statements is normative?
A. Large budget deficits should be avoided.
B. When the Federal Reserve increases the money supply, interest rates decrease.
C. High taxes tend to decrease saving.
D. A large budget surplus is likely to lower interest rates.
Answer: A
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Consider the market for peanut butter. If there is an increase in the price of bread (a complement for peanut butter) along with a drought in peanut growing areas, the
A) equilibrium quantity of bread increases. B) equilibrium quantity of peanut butter definitely decreases. C) equilibrium quantity of peanut butter might increase or might decrease. D) equilibrium price of peanut butter definitely rises. E) equilibrium price of peanut butter definitely falls.
Macroeconomics seeks to understand
A) product demand, product cost, and profit maximization. B) industry sales, marketing strategies, and corporate growth. C) public choices, private choices, and consumer maximization. D) economic growth, business cycles, and inflation.